Real Estate

KB Home CEO: California Home Prices to Slide Further


The chief executive of U.S. home builder KB Home said home prices in California could fall another 10 percent to 15 percent in the next 18 months.

CEO Jeffrey Mezger was speaking on a panel with Countrywide Financial CEO Angelo Mozilo and California State Treasurer Bill Lockyer. Lockyer said they all expected about 10 percent or more.

The audience was asked to vote on the home price outlook for the state at the Milken Institute State of the State conference in Los Angeles, and panelists could be heard discussing it among themselves.

KB Home shares gained 25 cents, closing Tuesday trade at $27.83 on the New York Stock Exchange.

Mezger saw a 10 percent to 15 percent drop, Lockyer told Reuters after the panel ended, which Mezger later confirmed.

"The others were all 10, maybe 10 plus. The north side of 10," Lockyer added. "I'm probably the least able to forecast, but that seemed like a reasonable trend."

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Mezger later said in an interview that urban areas would not see as much price pressure as suburban ones, since areas with jobs would be stronger.

"That's what I was speculating, but who knows?" Mezger said.

A large majority of voting attendees saw a decline of 5 percent to 15 percent or more.